In a prior post, we discussed how a New York debtor can protect property in a bankruptcy by using either New York State or federal bankruptcy exemptions. Both sets of exemptions get adjusted every three years. The adjusted New York State exemptions took effect on April 1, 2021, and any adjustments to the federal exemptions will take effect on April 1, 2022. The New York State Department of Financial Services makes these adjustments to keep up with the consumer price index.
About ten years ago, bankruptcy practitioners and debtors celebrated when the New York State homestead exemption increased from $50,000 to $150,000 for downstate residents (other counties had either a $75,000 or $125,000 exemption). New York State exemptions increased in January 2011 after Governor Patterson signed a law increasing exemptions and also permitting New Yorkers to use federal exemptions.
The new exemptions are outlined in the table below. As a reminder, married couples can double the exemption amount if they jointly own an asset.
| New York State Exemptions (before April 1, 2021) | Updated New York State Exemptions | |
| Homestead (primary residence only) | $170,825 in the Five Boroughs, Nassau, Suffolk, Rockland, Westchester, and Putnam Counties; $142,350 in Orange, Albany, Dutchess, Columbia, Saratoga, and Ulster Counties; $85,400 all other counties | $179,975 in the Five Boroughs, Nassau, Suffolk, Rockland, Westchester, and Putnam Counties; $149,975 in Orange, Albany, Dutchess, Columbia, Saratoga, and Ulster Counties; $89,975 all other counties |
| Vehicle (1 per debtor) | $4,550 ($11,375 if equipped for use by disabled debtor) | $4,825 ($11,975 if equipped for use by disabled debtor) |
| Wildcard (if you don’t take homestead exemption) | $1,150 | $1,175 |
| Cash (if no homestead) | $5,700 | $6,000 |
| 401k/403b/Pension | 100% | 100% |
| IRA | 100% | 100% |
| Jewelry | $1,150 | $1,175 |
| Household Goods and Clothing | $11,375 | $11,975 |
| Personal Injury | $8,550 | $9,000 |
| Life Insurance | Not exempt | Not exempt |
| Tools of the Trade | $3,400 | $3,575 |
Anytime the exemptions increase it’s a victory for debtors. One of the biggest misconceptions is that you lose everything if you file bankruptcy. As you can see from the chart this is hardly the case. Unfortunately, one of the exemptions that falls short is the personal injury exemption. The federal exemption is nearly three times the state exemption for personal injury cases.
It is important to speak with an experienced and skilled bankruptcy attorney if you are considering filing for bankruptcy relief. That attorney will take the time to review your assets and advise you on the best way to protect your assets.
Zimmelman Law PLLC
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